Suppose a Firm's Total Cost Curve Is TC = 5Q²

question 112

Essay

Suppose a firm's total cost curve is TC = 5Q² + 6Q + 125.
a. Find the firm's marginal cost, average total cost, and average variable cost.
b. Use calculus to find the output level that minimizes average total cost.
c. Show that ATC = MC at this output level.
d. Show that this is the minimum ATC by examining the second derivative.

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Definitions:

Outstanding Shares

Represents the total number of shares of a corporation's stock that are currently owned by all shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s insiders.

Limited Liability Company

A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability protection of a corporation.

Partnership

An association of two or more persons to carry on a business for profit.

Corporation

A legal entity recognized by law, distinct from its owners, with rights to own property, sue, and be sued.